Ministry speaks out about proposed State monopolies
HANOI – The Ministry of Industry and Trade affirmed in a statement released on Tuesday that its controversial draft decree neither extend nor make additions to the category of State monopoly.
In this spirit, the ministry in collaboration with relevant agencies reviewed the current regulations to determine the types of goods and services subject to State monopoly, including the Security Law, the National Defense Law, the Electricity Law, the Post Law, and the National Reserve Law.
Based on the review results, the draft category since 2015 was passed around for comment at ministries, ministerial-level agencies, local governments, the Vietnam Chamber of Commerce and Industry (VCCI) and businesses concerned. Also, it was published on the websites of the ministry and the Government for consultation with all organizations and individuals in society.
When submitted to the Government in December 2015, State monopolies covered 19 types of goods, services and commercial activities. However, based on the opinions of the members of the Government and the Prime Minister’s instruction, raw gold, with “export and import for production of gold bars” as the corresponding commercial activity, was added to the category, taking the total number of goods and services to 20.
All the goods and services in this category are those monopolized by the State, consistent with the principle prescribed in Clause 1 in Article 4 of the draft decree. This principle is that State monopolies should only be established in fields and areas related to national defense and security, national interests, public interests or where other economic sectors do not want or are unable to participate.
“The category neither extends nor adds other State-monopolized areas than those already defined in the current legal documents,” the Ministry of Industry and Trade emphasizes.
The ministry’s statement also mentions the ability of trimming the State monopoly category.
For example, State monopoly over the goods or services specified in the category does not necessarily apply to all commercial activities related to such goods or services, but just limited to one or some specific activities, consistent with the policy of restricting the scope of State monopoly and the current legal provisions.
The category attached to the draft decree may be curtailed when the relevant laws and ordinances abolish certain State-monopolized areas, when it is recommended by ministries, ministerial-level agencies or local governments, or when there is a written proposal reflecting the need for and the possibility of all economic sectors participating in the areas controlled by State monopolies.
The draft decree is stirring up controversy, though.
For example, the 2015 Commercial Law stipulates that “the State shall exercise State monopoly over a number of goods and services or in some areas for a definite time to protect national interests. The Government shall specify the list of goods, services and areas subject to State monopoly.”
Nguyen Minh Duc, a legal expert from VCCI, said: “Thus, this decree does not define the term of monopoly. It is understood that State monopoly will reign over those 20 industries for an indefinite time. This is not consistent with the Commercial Law.”
Nguyen Dinh Cung, president of the Central Institute for Economic Management (CIEM), said the launch of a decree on State monopoly over trade in the current context was an non-market move, hindering competition and going against the trend of reform.
“In the current context, there must not be any decree saying which should be monopolized by the State, because this is illogical in the first place. Those provisions in the Commercial Law that has been outdated should be removed or modified,” the expert remarked.
“We cannot restructure the economy, innovate the growth model, and promote entrepreneurship with legal documents like this.”